Secrecy benefits both parties: Opposing view

Confidential settlements are used every day and attract little attention unless the dispute is a celebrity divorce or a major liability case that involves the interest of the public beyond mere voyeurism.

For decades, it has been standard practice for settlements that involve drugs claimed to cause serious injury, or recalls of consumer products like cars or lawn mowers, to be partly or even completely confidential.

Critics of the practice blame powerful, overbearing defendant corporations for imposing confidentiality on reluctant plaintiffs. That often is not the case. Often, both parties benefit from confidentiality.

A plaintiff may want to keep the settlement amount confidential. She may not want her neighbors or relatives to know how much she got. It's no more their business than is the size of her bank account. She should not be forced to reveal it as the price of settling her case.

Critics, including many plaintiffs' lawyers, say that if parties are allowed to keep the settlement amount confidential, the court should not seal the rest of the settlement, precluding other plaintiffs and the government from free, easy access to other facts about the case that would be useful to them.

Contrary to plaintiffs' lawyers, actual plaintiffs often want non-financial details of their cases sealed, too. They worry about the revelation of personal facts. They may have been driving drunk or may suffer from an embarrassing medical condition. If they can't seal the settlement, they may not make claims they should be able to make.

When confidentiality is valuable to defendants, they will pay more to settle a case if they can settle it confidentially. A plaintiff may want or need the extra money that is offered in return for confidentiality.

She suffered the loss. She should not have to give up some of her compensation in order to make it easier for plaintiff lawyers to sue or for the government to do its job.

Both sides should be free to bargain for confidentiality.

Erik Gordon is a professor at the University of Michigan's Ross School of Business.